Archive for the ‘SolarCity’ Category

photo: SolarCity

I wrote this story for Grist, where it first appeared.

California solar companies are continuing their eastward expansion, with Silicon Valley’s SolarCity on Wednesday acquiring the residential operations of one of the East Coast biggest solar installers, groSolar.

With the acquisition, SolarCity, California’s largest residential solar installer, will move into Massachusetts, New Jersey, New York, and Pennsylvania. SolarCity is on something of a spending spree — in January, the company bought Clean Currents Solar, a Washington, D.C., solar installer, and expanded its operations to the nation’s capital and Maryland.

Meanwhile, Sungevity, an Oakland, Calif., solar installer, raised $15 million from investors in December to expand into six Northeastern states.

“What I see happening in this market is that in order for the solar industry to survive without subsidies, we have to get to economies of scale and build a trusted brand,” Lyndon Rive, SolarCity’s chief executive, said in an interview. “I see consolidation continuing with those companies that get economies of scale offering more services.”

Citing California state figures, Rive said the number of solar installers in the Golden State had fallen from 525 in 2007 to 250 by the end of 2010, even as the residential solar market grew by 40 percent a year.

“Most of them just went out of the solar business,” says Rive. “A lot of people who got into solar were electricians, roofers, and the like. They realized it’s a very difficult business, and without scale it’s not competitive.”

The question, of course, is whether California solar companies will find the same success in the not-so-sunny Northeast as they navigate different local incentives for solar and a region that is less culturally green than their home state.

The California market, after all, is a monster: home to nearly 40 million people and a state policy to subsidize a million solar roofs. Not to mention a mandate requiring utilities to obtain a third of their electricity from renewable sources by 2020 — a policy that is translating into contracts for thousands of megawatts of photovoltaic power.

In some ways, the East Coast market is terra incognita, as no state matches the intensive solar data gathering of California. For instance, SolarCity thinks groSolar is the Northeast’s largest solar installer, based on its 2,500 customers, but doesn’t know for sure.

“I think the East Coast market is the perfect market,” says Rive. “There’s some logistical challenges — there’s more trees and an older housing stock. From a cultural point of view, I think they’d very much like to see the savings and have the benefit of using clean power.”

But the biggest challenge is political, as solar incentives in the Northeast have waxed and waned with over the years.

“When you go into any new state, the biggest pitfall is the volatility in policy,” says Rive.

Still, Rive and his California competitors believe their experience toughing it out in the United States’ biggest solar market gives them a leg up as they head East.

“California is an incredibly competitive market, so it teaches you to be fairly nimble and to keep your product offerings sharp,” Rive says. “As you go into other markets, that learning can be applied.”

photo: Walmart

I wrote this story for Grist, where it first appeared.

When Walmart announced on Monday that it would install 15 megawatts’ worth of solar arrays on as many as 30 of its stores in California and Arizona, it set out to shape the solar market in more ways than one.

The reason? The world’s biggest retailer specified that many of the new solar installations should use thin-film photovoltaic panels. Thin-film solar cells are printed or deposited on glass or flexible materials. And although they are less efficient at converting sunlight into electricity, they can be produced at a lower cost than traditional crystalline silicon solar cells.

Thin-film solar currently accounts for just about 20 percent of the solar market. The most technologically advanced versions have had a difficult time grabbing market share due to competition with low-cost Chinese crystalline silicon manufacturers and a recession that has dried up investor funding.

Enter Walmart.

“By leveraging our global scale to become a more efficient company, we are able to lower our expenses and help develop markets for new technologies,” Kim Saylors Laster, Walmart’s vice president of energy, said in a statement. “Developing and incorporating new renewable energy sources, like thin film, reduces energy price risk and aligns very well with our commitment to solving business challenges through technology.”

Walmart signed a deal with SolarCity, a leading Silicon Valley solar installer, to manage the project. SolarCity will install and own the photovoltaic arrays on Walmart stores and sell the electricity to the retailer.

SolarCity’s chief executive, Lyndon Rive, told me Monday that the company will install thin-film solar arrays made by First Solar and Miasolé.

First Solar, which makes an older variant of the technology called cadmium telluride, is the world’s biggest thin-film manufacturer and Walton family members were early investors in the Tempe, Ariz., company. First Solar is also an investor in SolarCity, which already uses its photovoltaic panels.

Miasolé, a Silicon Valley startup, is one of a number of companies that has developed a type of thin-film solar cell called copper indium gallium selenide, or CIGS, that offers the promise of higher efficiencies and lower costs.

“Walmart wanted to see thin-film be adopted and made that a requirement in the bidding process,” says Rive.

He noted that the retailer did not dictate the percentage of stores that should receive thin-film solar arrays but expects the technology will account for the majority of installations over the next year.

“There’s no hard and fast number but they’d like us to do as much as possible,” said Rive.

Another twist in the Walmart deal is that the company collaborated with the Environmental Defense Fund (EDF) to develop the criteria used to select SolarCity. (EDF, which maintains an office near Walmart’s headquarters in Bentonville, Ark., has long worked with the retailer on sustainability initiatives.)

The goal, Walmart said in a statement, “was to identify the most innovative solar technologies that would create benefits on three fronts — to the environment, technology, and financial viability.”

The bigger ambition, though, is to shape the solar market, as Walmart acknowledged.

“The company’s large scale on-site installation of CIGS could help further the development of this technology and bring it to market quicker, while use of cadmium telluride thin film could help make the case for other businesses to adopt the technology for on-site commercial use.”

In Wednesday’s New York Times, I wrote about two experimental projects in California to store solar energy produced by photovoltaic rooftop arrays:

In the garage of Peter Rive’s San Francisco home is a battery pack. It is not connected to Mr. Rive’s electric Tesla Roadster sports car, but to the power grid.

The California Public Utilities Commission has awarded $1.8 million to Mr. Rive’s company, SolarCity, a residential photovoltaic panel installer, to research the feasibility of storing electricity generated by rooftop solar arrays in batteries.

As rooftop solar systems provide a growing percentage of electricity to California’s grid, regulators and utilities are increasingly concerned about how to balance the intermittent nature of that power with demand.

One possible solution is to store energy generated by solar arrays in batteries and other systems and then feed that electricity to the grid when, say, a cloudy day results in a drop in power production. And when demand peaks, electricity generated from renewable sources could be dispatched from batteries rather than fossil-fuel burning power plants.

“As soon as distributed solar starts providing 5 to 10 percent of demand, its intermittent nature will need to be addressed,” said Mr. Rive, who is SolarCity’s co-founder and chief operating officer.

SolarCity is teaming with Tesla Motors, the Silicon Valley electric car company run by Mr. Rive’s cousin, Elon Musk, and the University of California, Berkeley, to study how to integrate solar arrays and off-the-shelf Tesla lithium-ion battery backs into the grid. SolarCity plans to put such systems in six homes.

“We think in the years ahead this will be the default way that solar is installed,” Mr. Rive said. “Getting the costs down, though, is not going to be an easy task.”

Homeowners could potentially benefit by tapping batteries at hours when electricity rates are high or using them to provide backup power if the grid goes down.

The research has just begun, and at the moment SolarCity is testing the impact of charging and discharging electricity from the Tesla battery pack in Mr. Rive’s garage. His roof sports a three-kilowatt solar array.

“We’re at the point now where we can direct the battery to charge and discharge at specific times by sending a signal over the Internet,” Mr. Rive said.

Included in the $14.6 million awarded for solar energy storage research by the utilities commission was $1.9 million to SunPower for a project that will store in ice and batteries electricity generated by solar arrays at Target stores.

SunPower, a Silicon Valley solar panel manufacturer and power plant developer, will work with Ice Energy, a Colorado company that makes systems that use electricity when rates are low to form ice. When rates are high, air conditioning refrigerant is cooled by the melting ice rather than by an electricity-hogging compressor.

The Ice Bear system and a solar array will be installed at one Target store while battery packs will be used at two other stores in California.

Legislation pending in New York that would require the state to install 5,000 megawatts of solar power by 2025 could generate 22,198 jobs and boost the economy by $20 billion, according to a report released by Vote Solar on Wednesday.

The cost to consumers would be just a 39-cent-a-month hike on their utility bills, the report found.

Vote Solar, a San Francisco non-profit that is backing the bills in the New York legislature along with the Natural Resources Defense Council and other environmental groups, commissioned the study conducted by Crossborder Energy. Described as an independent consultant, Crossborder relied on economic models developed by the National Renewable Energy Laboratory to make its projections.

“We note that in an effort to be conservative in our assumptions, these benefits are calculated without taking into account any potential new manufacturing,” the report stated. “Precedent shows that states that make a clear commitment to clean energy see reciprocal investment on behalf of manufacturing companies. For example, in both Arizona and California, the states’ strong and transparent policies were fundamental to the decisions of two major global solar manufacturers…to locate their first domestic manufacturing operations in those states.”

New York currently has less than 25 megawatts of solar installed. The New York Solar Jobs and Development Act would require the state’s utilities to install enough solar to account for at least 2.5 percent of their electricity sales by 2025. Those targets could be reached through residential and commercial rooftop solar installations or by building solar power plants. Utilities could own and operate their own solar power facilities to meet 25 percent of their mandate.

But the legislation does not specify incentives or other policies to encourage solar installations, which would inevitably affect the cost of the program for developers and consumers.

photo: TXU Energy

In The New York Times on Thursday, I wrote about Texas utility TXU Energy hooking up with Silicon Valley’s SolarCity to offer its Dallas area customers the option of going solar:

TXU Energy, a Texas utility with two million customers, is making it possible for homeowners in the Dallas area to lease or buy rooftop solar-power systems in one of the first programs of its kind.

The energy provider said Wednesday that it had signed a deal with SolarCity, a Silicon Valley start-up that finances and installs residential rooftop arrays, to manage the initiative.

“Our vision is to supply solar power to millions of homes and businesses,” said Lyndon Rive, SolarCity’s chief executive. “The only way to achieve this is by partnering with companies that are providing power today. If we can partner with energy providers, adoption will happen much faster.”

Homeowners will sign up for the TXU Energy Solar Program through the utility, and SolarCity will design and install the solar-panel systems. Under the lease program, the owner of a three- to four-bedroom house would typically pay about $35 a month after tax incentives, according to TXU Energy.

SolarCity retains ownership of the photovoltaic arrays and responsibility for their maintenance. The solar-power system could be bought outright for about $26,000, TXU Energy said.

SolarCity will pay a referral fee to TXU Energy for each system leased or sold.

photo: SolarCity

In my new Green State column on Grist, I write about how SolarCity, a Silicon Valley rooftop solar installer, is getting into the electric-car charging station business:

You can’t get more California greenin’ than this.

Peter Rive can charge up his Tesla Roadster electric sports car in his San Francisco garage with carbon-free electricity supplied by a solar array on his roof. Then, if he’s in the mood for a road trip, he can drive to Los Angeles, stopping at a solar-powered charging station along the way to top off the battery.

The free charging stations on the “solar highway”—aka the 101—were recently installed by SolarCity, the Silicon Valley rooftop solar company Rive founded with his brother Lyndon. (The electric-blue Roadster sitting in his garage was made by his cousin Elon Musk‘s startup, Tesla Motors.)

So what’s a solar company doing installing highway charging stations for six-figure sports cars driven by people with seven-figure salaries?

In part, it’s a result of SolarCity’s connection to Tesla and grants the electric carmaker received from the state of California to demo charging stations. It makes for great PR, of course, but the bigger picture here is how the emerging electric vehicle industry will drive (sorry) the adoption of residential and commercial photovoltaic systems.

photo: SolarCity

When Wall Street collapsed last year so did tax equity funds, the primary vehicle to finance renewable energy development. But as I write in The New York Times today, investors are beginning to jump back into the game.

U.S. Bancorp has agreed to finance $100 million of solar installations in 2009 for California startup SolarCity. Investors are being lured in part by a federal stimulus package provision that lets them take a 30 percent investment tax credit for renewable energy projects as a cash grant:

The credit crunch has walloped the residential solar industry, making it hard for installers like SolarCity to tap investor funds to finance rooftop arrays for their customers.

But in a sign that the recessionary clouds are parting a bit, SolarCity on Tuesday said that U.S. Bancorp has agreed to finance $100 million worth of solar installations in 2009.

That’s double the money the bank committed to provide SolarCity in June when the original deal – but not the financial details – was announced.

SolarCity, based in the Silicon Valley suburb of Foster City, offers customers the option of leasing their rooftop panels and thus avoiding the five-figure cost of buying a solar system.

The company retains ownership of the solar array and thus qualifies for a 30 percent federal tax credit against its cost. Since most startups have no use for such tax credits, they give them to investors in exchange for financing installations.

Still, most such tax equity partnerships have collapsed along with the Wall Street banks that often funded them. In fact, U.S. Bancorp stepped in after Morgan Stanley pulled the plug on a financing arrangement with SolarCity earlier this year.

“For all of this year, tax equity has been the number one constraint in financing for the entire solar industry,” said Lyndon Rive, SolarCity’s chief executive. “In the third quarter of last year there were about 20 active banks and insurance companies making tax equity investments. They all fell off a cliff and now there’s three or four.”

About Green Wombat

Green Wombat is written by
Todd Woody, a veteran environmental journalist based in California who writes for The New York Times, the Los Angeles Times, Grist and Yale e360. He's one of the few people on the planet who have held a northern hairy-nosed wombat in the wild.

Todd formerly was a senior editor at Fortune magazine, an assistant managing editor at Business 2.0 magazine and the business editor of the San Jose Mercury News.